I am currently owning 7 out of 8 units in a small condo association. Each unit pays 200 for HOA fee.
Does it make sense if I acquire the last unit I havent own and convert all units to a single multifamily property? The reason for me is that I can increase cap rate by not paying HOA fee every month(7 units x 200)..Any pros and cons?
As the owner of 87.5% of the units in that building, you should have a big say in how things are run in that building.
Without knowing my numbers, my intuition is that it would probably make sense to acquire the last unit if posisble.
However to know for sure, I would run a comparison analysis between keeping the units separately or pricing the building as a one multifamily.
I would use the statements from the HOA to know precisely what my expenses would be.
thanks so much, Patrice!
@Steve Sun Why go through all that cost just to reduce the HOA fee?
Why not just offer to manage the property yourself (you run the HOA/PM) . This way you control the cost. Essentially, give the 1 owner half the HOA (1200/yr) or free HOA fees. Shouldn't be a big argument when you save them money.
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